Richard, you have hit the nail on the head.
Same old saying - You get what you pay for.
Custom templates take a fair bit of time, then there are tweaks and changes until the client is happy.
If you have a 20 pages site, all needing SEOing properly - this is a few days work. It´s the tweaking to perfection which is important. It´s titles, URL forming, descriptions, keywords, keyword density checking... so much goes into this.
Also to have regular meetings with the client to advise them how to best promote the site too. This is time consuming too, so you need to account for this. It can also get expensive on coffees hehe
As for not wanted a content management system but enable clients to add/update this site, this is impossible. If you even develop a custom application for this it is still a CMS

It´s also essential if an open source CMS is used that the designer keeps this updated - this is why 100 quid is a bit low for such work.
Also to help the client with some link building too, submit to online directories, forums, link between sites you deal with (relevent sites), facebook, twitter and suchlike for traffic - let them know how to make it a success.
I always tell clients to use the Website Grader tool and the Submit Express Analyzer to ensure their site is made correctly - give it a go - you can then tell your designers if they have or havent done a good job and ask for an improvement